Pipeliners

April 24, 2009  - Dow Jones Newswires by Susan Daker - HOUSTON (Dow Jones) Canadian National Railway's (CNI) "Pipeline On Rails" initiative to transport oil-sands production is feasible, Alberta Energy Minister Mel Knight said Friday. Earlier this month, the Financial Post, a Canadian business journal that is part of the National Post, reported that CN was undertaking a project to move oil by rail as a way to compete with pipelines. More pipeline capacity is needed to transport oil-sands production, a growing source of oil supply to the U.S., but construction can be expensive and time-consuming. The newspaper reported that by the end of the year, CN will be shipping 10,000 barrels a day. In the near future, CN believes it can ramp up that rate to 300,000 to 400,000 barrels a day, Knight told reporters in Houston. The product would move from eastern Alberta to the West Coast of Canada, Knight said. The Financial Post reported that CN could eventually scale up to a million barrels a day and could send crude as far away as the U.S. Gulf Coast. CN approached the Alberta government about six months ago with the project, and the two groups have had "very good meetings," Knight said. Knight said he has seen CN's economic feasibility study. "It's more than economical on a comparison to pipelines," Knight said. Of course, though, he added, any pipeline company would say otherwise. And the Alberta government hasn't done its own feasibility study, he said.